JPMorgan Investment Bank 2001

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JPMorgan Investment Bank 2001

• Analyst Meeting January 16, 2002

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2001 IFR Bank of the Year

• The rigours of mega-mergers, particularly those
  with cultural differences to bridge, are usually
  sufficient to distract most banks for at least a
  year. So to remain resolutely focused on the
  business in year one is striking in itself. To
  do it against the backdrop of market volatility
  and a severe industry downturn is remarkable. To
  achieve manifest market share gains and
  significant earnings enhancements is nothing
  short of astounding. JPMorgan is IFR's Bank of
  the year.
• International Financing Review
• Review of the year 2001

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2001 Investment Bank Financials
billions
2001
Financial Highlights
Geographical Revenue Diversification
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JPMorgan Business Model
Serving the 360o financial needs of the world's
pre-eminent corporations, financial institutions
and governments through an integrated delivery
model that leverages our global scale and broad
leadership positions...
Pages
Client Relationships
Global Presence, Pre-eminent Client Base
4-5 Product Breadth Leadership
6-10 The 360o Relationship - Integrated
Approach 11-12 Risk Management Financial
Discipline 13-15
Products
Approach
Performance
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Global Presence, Pre-eminent Client Base
2001

• Developing relationships with nearly 10,000
  issuer clients
• 1,500 issuer clients each generated over 1
  million revenue in 2001
• Broad issuer and investor client base across all
  industry sectors
• Strong relationships with over 90 of Fortune
  1000 companies in the US and equivalent
  penetration in Europe, Asia-Pacific and Latin
  America
• Serving our clients across the globe from offices
  in over 60 countries
• Global trading operations in all major
  money-centers interacting with premier
  institutional investors

of Issuer Clients by Industry
Technology, Media Telecom 28
Financial Institutions Governments 29
General Industries 43
a
2001
of Issuer Clients by Region
a General Industries includes Chemicals,
Consumer, Diversified Industrials, Global
Logistics Transportation, Healthcare, Mining
Metals, Oil Gas, Paper Packaging, Building
Products, Power, Real Estate and Retail Industries
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Pre-eminent Client Base - Top 100 Issuer Clients
2001
Revenue by Product - Top 100 Issuer Clients
Top 100 Issuer Clients

• Provide 30 of total JPMorgan issuer revenues
• Average revenue per client of 27 million per
  year
• 68 of revenue generated from investment grade
  clients
• 47 of revenue derived from clients outside North
  America
• Average of 5 services per client

a
2001
Revenue by Region - Top 100 Issuer Clients
a Operating services include Cash Management,
Custody Trust (Operating services results are
reported separately within Treasury Securities
Services section of the earnings release)
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Product Breadth Leadership
Progress towards global top 3 leadership
positions...
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Bonds
2001 Momentum
Bonds League Table - JPMorgan Rank

• 2 in US Investment Grade retained from 2000
• 3 in European Investment Grade vs 7 in 2000
• 1 in Latin America Bond underwriting
• 2 in Q4 in High Yield vs 3 in Q3, 5 in Q2 and
  9 in Q1
• Lead or co-manager on 40 of all High Yield volume

Source Thomson (Query Numbers F5, B7, B4, B11,
F6, F4, AQ1)
Source Thomson
Example Transactions
Recognition

• Worlds Best Debt House (Euromoney, 07/01)
• Emerging Market Bond House of the Year (IFR
  Review of the year 2001)
• 1 Best International Debt Lead Arranger
  (Emerging Markets Investor, 10/01)
• 1 Overall Debt Arranger (Euromoney, 06/01)

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Mergers Acquisitions
2001 Momentum

• 5 in Global MA announced vs 6 in 2000, 5.6
  market share increase (largest relative increase
  of any top advisor)
• 2 in number of announced deals (403), average
  deal size down 13 vs industry average down 36
• 30 market share of Global MA announced
  transactions over 1 billion vs 19 in 2000
• 1 in Latin America announced and completed
  (excluding Citibanks acquisition of Banamex)
• 2 in European completed - 1 in Spain, 2 in
  Germany, 1 in European cross-border
• 2 in both announced and completed Asia Pacific
  rankings

Source Thomson (AD1)
Example Transactions
Source Thomson
Recognition

• Deal of the Year - OCBC/Keppel Capital (Finance
  Asia)
• Deal of the Year - SingTel/Cable Wireless Optus
  (CFO Asia)
• MA Agreed Merger of the Year - BHP/Billiton
  (Corporate Finance)
• MA Buyout of the Year - Messer Griesheim
  (Corporate Finance)

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Equities
2001 Momentum

• 6 and 8 Q4 run-rate in US Equity and Equity
  Related vs 6 and 5 in full-year 2000
• 7 and 5 in H2 2001 in Global Equity and Equity
  Related vs 10 and 2 in H1 2001
• 6 in Global convertibles vs 14 in 2000
• 3 in European convertibles
• 2001 US Equity Bookrunner market share trend

Source Thomson (C1)
5
6
Example Transactions
8
9
1Q
2Q
3Q
4Q
Source Thomson
2001 Actions Positioning for 2002 and Beyond

• New organization structure
• Significant new hires
• Increased client penetration

Recognition

• European Equity-Linked House of the Year (IFR
  Review of the year 2001)
• Top Equity-Linked House (Capital raising poll of
  CFOs and Treasurers) (Euromoney, 12/01)
• 15 Institutional Investor All-America Equity
  Research Rankings (10/01)

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Global Top 3 Leadership Positions
of 2001 Risk First Place Derivative Positions
Derivatives

• Derivatives House of the Year (IFR Review of the
  year 2001)
• Derivatives House of the Year (Risk Annual
  Awards, 01/02)
• Won 10 of 14 1 awards (Risk, 09/01)
• Best Overall Derivatives Dealer (Derivatives
  Strategy, 01/01)

Product Categories (212 possible)
Source Risk Magazine
Foreign Exchange
Cash Management, Custody Trust

• Best Overall FX Provider (Global Investor, 03/01)
• Top FX Bank by Market Share (Euromoney, 05/01)

• Best at Transaction Services for North America
  (Euromoney, 07/01)
• World's Best at Custody (Euromoney, 07/01)
• 1 in CHIPS and Fedwire average daily volume (NY
  Clearing House, The Federal Reserve Bank of New
  York)
• 1 Trustee for US Corporate and Municipal Debt
  (Securities Data Company)
• 1 in Issuing and Paying Agent Services for US
  Commercial Paper (Depository Trust Company)

Syndicated Loans

• Ranked 1 in Global Syndicated Loans since table
  inception
• Loan House of the Year (IFR, Review of the year
  2001)

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The 360o Relationship - Integrated Approach
Delivered through single client executive and
broad coverage team...
Investment Bank
Strategic Advisory
Capital Raising, Sales,
Trading, Research, Risk Mgmt.
Capital Raising, Sales, Trading, Research,
Risk Mgmt.
MA
Debt
Equity
Client
Wealth mgmt.
Operating services
Cash Mgmt., Custody, Trust
Investment Mgmt., Private Banking
Private equity
Investment Mgmt Private Banking
Treasury Securities Services
Retail
Credit Card, Payroll Services, Employee Banking
Equity and Mezzanine Capital Financing
Retail Middle Markets Financial Services
JPMorgan Partners
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The 360o Relationship - Success of the Platform
19 IFR Awards Received in 2001
JPMorgan Advertisement
Bank of the Year Loan House of the Year US Loan
House of the Year US Leveraged Loan House of the
Year Asia-Pacific Loan House of the
Year Derivatives House of the Year Credit
Derivatives House of the Year Interest-Rate
Derivatives House of the Year Emerging Market
Bond House of the Year Asia-Pacific Bond
House Latin America Bond House of the Year North
American Securitisation House Europe
Equity-Linked House of the Year 6 Deal
Awards Derivatives House of the Year Interest
Rate Derivatives House of the Year Credit
Derivatives House of the Year
The 360o relationship.
To call it client-centric sells it short. This is
a whole new way of working.
Theres a new kind of relationship. While it
keeps your goals front and center, it also breaks
down old barriers. With strategic advice,
capital raising, operating services, private
equity and wealth management, all working
together, with only one goal - your success.
Offering you knowledgeable people, industry
insight and a global perspective. Once again,
JPMorgan is leading the way, putting clients in a
better position.
3 Annual Risk Awards Received in 2001
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Risk Management - Credit, Market, Operating
Reputation
Current cyclical focus Credit
Credit Model

• Credit assessment and approval is independent of
  revenue-producing functions
• Credit risk is distributed in both primary and
  secondary markets
• Credit is targeted and extended based on our
  total relationship value as measured by
  shareholder value added (SVA)
• Retained risk is actively managed
• Only 8 of 2001 revenue comes from credit
  portfolio compared to15 in 1998

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Credit Metrics
billions
billions
billions
Investment Bank Net Loans
Commercial Unused Commitmentsa
Derivatives Counterparty Outstandingsb
(7)
(2) CAGR
(6) CAGR
a Unused commitments includes unfunded
commitments to extend credit, standby letters of
credit and guarantees and other letters of
credit b Pre-merger comparable data for 1999 and
1998 is not available due to netting
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Financial Discipline
Full-time Employees
billions
Total Cash Expenses
Total Headcount
(23)
a
a 2000 Exit Rate calculated using 4Q 2000
non-incentive expenses x 4 with incentives at
2000 actual payout
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Disclaimer
This presentation contains statements that are
forward-looking within the meaning of the Private
Securities Litigation Reform Act of 1995. Such
statements are based upon the current beliefs and
expectations of JPMorgan Chase's management and
are subject to significant risks and
uncertainties. Actual results may differ from
those set forth in the forward-looking
statements. These uncertainties include the risk
that the tragic events of September 11, 2001 and
their aftermath will have an adverse effect upon
markets and businesses in general and exacerbate
the following additional risks and uncertainties
the risk of adverse movements or volatility in
the debt and equity securities markets or in
interest or foreign exchange rates or indices
the risk of adverse impacts from an economic
downturn the risk of a downturn in domestic or
foreign securities and trading conditions or
markets the risks involved in deal completion
including an adverse development affecting a
customer or the inability by a customer to
receive a regulatory approval the risks
associated with increased competition the risks
associated with unfavorable political and
diplomatic developments in foreign markets or
adverse changes in domestic or foreign
governmental or regulatory policies the risk
that the merger integration will not be
successful or that the revenue synergies and cost
savings anticipated from the merger may not be
fully realized or may take longer to realize than
expected the risk that the integration process
may result in the disruption of ongoing business
or in the loss of key employees or may adversely
affect relationships with employees, clients or
suppliers the risk that the credit, market,
liquidity, and operational risks associated with
the various businesses of JPMorgan Chase are not
successfully managed or other factors affecting
operational plans. Additional factors that could
cause JPMorgan Chase's results to differ
materially from those described in the
forward-looking statements can be found in the
2000 Annual Report on Form 10-K of J.P. Morgan
Chase Co., filed with the Securities and
Exchange Commission and available at the
Securities and Exchange Commission's internet
site (http//www.sec.gov).